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Rep. Patrick McHenry

The hunt for the GOP’s crypto-money laundering plan

A House Financial Services subcommittee has a hearing scheduled this afternoon to talk about crypto and crime.

We’re not quite sure what to expect, and neither were the lawmakers we asked on Wednesday. But we think you should pay close attention to this hearing, which will be stocked with witnesses representing Coinbase, Circle, TRM Labs and more.

House Republicans led by Chair Patrick McHenry (R-N.C.) have made crypto policy a focus of this Congress, cranking out bills that would reshape the legal and regulatory environment for digital assets.

But the question of what the House GOP actually wants to do to address gaps in the federal government’s authority to police crypto’s role in organized crime and terrorism remains open. McHenry signaled in late 2023 that this was something he wanted to tackle this year, yet specifics have been elusive.

So how Republicans on the House Financial Services Subcommittee on Digital Assets begin to publicly address this today will set up a lot of conversations later this year. If Congress is going to send any meaningful crypto legislation to the president’s desk soon, we expect crypto anti-money laundering reform to be a key ingredient.

It won’t be easy. “I cannot speak to what Republicans believe, but I’m aware of no consensus in Congress as to how to best address AML, [combatting the finance of terrorism] questions in the context of crypto,” Rep. Ritchie Torres (D-N.Y.) said.

We’ve been asking a lot of folks in Washington what a Republican approach to crypto AML reform might look like in recent weeks. For now, a deep shrug remains the consensus.

“I don’t know that I can answer that question,” Rep. Frank Lucas (R-Okla.) told us. “I expect the hearing to take on a life of its own. There’s a diversity of opinion in the committee.”

We also asked Rep. Stephen Lynch (D-Mass.) this question. Lynch is the top Democrat on the crypto-focused subcommittee, and he told us that Republicans have ground to make up in this area.

“I would need them to have cooperation with law enforcement, right?” Lynch said. “Bring them in. Bring the regulators in, as opposed to trying to kill the regulators, defund them.”

— Brendan Pedersen

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Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.